Blockchain technology and its beneficial uses have made many large financial institutions adopt and exploit it in practical applications.

Recently, the National Bank of China exploited the blockchain technology to issue a car paper backed by assets worth $17 billion.

Zheshang Bank of China – a national joint commercial bank based in Zhejiang Province – has used blockchain technology to bring asset-backed commercial paper (ABCP) to the Chinese market.

This paper was released last week, and was valued at nearly $17 billion.

Chinese banks and blockchain technology:

The Chinese Bank “Zheshang” successfully implemented the “Lianxin 2020 Lianjie” commercial paper in its first stage with its backing of financial assets on June 5, according to a statement local report.

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It became the first ABCP project in the country and one of five pilot projects launched by the National Association of Institutional Investors in the Capital Market.

The commercial paper that was worked on and the use of blockchain technology in its transfers and support with various assets amounted to 120 billion yuan, or about 16.93 billion dollars, for a period of six months, with an “extension issuance option.”

Commercial paper collects the assets of many companies in various sectors, such as industrial chemicals and smart city technology, and according to the report, most of these companies are private companies.

According to a spokesperson for the National Association of Institutional Investors in China Financial Market, who stated the following:

The launch of the ABCP commercial paper in China was an organic integration of supply chain finance and SME finance, increasing access to finance for SMEs facing difficulty in financing through direct debt issuance.

Officials from Zheshang Bank explained that the use of blockchain technology has been combined with asset securitization, with the aim of providing financial options to a greater number of small and medium-sized enterprises that act as both upstream and downstream, helping to significantly increase access to business financing.

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ABCP commercial paper is an asset securitization product consisting of accounts receivable and one or more company invoices, which companies generally use to meet their short-term financing needs, and they typically have maturities of between 90 and 270 days.

China and the blockchain:

While cryptocurrency trading in the world’s most populous country remains officially banned, the country has opened up considerably in terms of adopting blockchain technology.

Usage levels have increased rapidly since last year when Chinese President Xi Jinping said that China should invest more in blockchain.

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Since then, developments have included the launch of the Blockchain-based Services Network (BSN) that was launched in April 2020, we had talked about on the Bitcoin Arab website:

Allowing the Chinese National Blockchain Service for global access and use

Another government project occurred recently when China contracted with giants such as Huawei, Tencent Holdings, Ant Financial Services, and Baidu to assemble and form a national technical committee that will test distributed accounting technology, and plan to develop the standards needed to employ blockchain. Across many industries in China.

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